SAB may lose China jewel in merger

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A successful marriage between beer giants Anheuser-Busch InBev and SABMiller would almost certainly have to be done without one of the jewels in SAB’s crown: its 49 per cent stake in China’s biggest-selling beer brand.

That would mean the combined mega-brewer would have to forgo the huge distribution and bottling facilities held by SAB’s China joint venture, CR Snow, a platform that would help it grow in the huge Chinese beer mar- ket.

“The big value of most of these (Chinese) brands is the bottling facilities and the distribution systems they have,” said Ben Cavender, Shanghai-based principal at China Market Research Group.

“With long-term brand building over the next few years having that access would be very big.”

ABI’s attempt to tie-up with SAB would be up against two big obstacles in China, where SAB and its joint venture partner China Resources Enterprises make Snow, the world’s biggest selling beer by volume.

Firstly, the change of ownership triggered by the deal would probably hand CRE the right to buy out SAB’s stake, a right banking sources say CRE would likely be keen to exercise.

Even if CRE doesn’t use that right, lawyers anticipate China’s antitrust watchdog will be waiting in the wings to rule any deal must exclude CR Snow.